BMI's Executive Summary

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Strong economic growth, rising incomes and the growth of credit options for car loans have combined to make the Bulgarian car market one of the fastest growing in Europe, according to BMI's latest Bulgaria Automotive Report.

BMI estimates that overall growth in the automotive market was 14.6% in 2007, down from 29.7% in 2006 due largely to the initial impact of EU membership on the used car market. The slowdown was expected, mirroring the trends seen in the 2004 group of accession states, which saw a sharp decline in new car sales as a result of a surge in used vehicle imports caused by trade liberalisation. BMI believes annual automotive sales growth will return to at least 20% from 2010, with annual car sales exceeding 109,000 units by 2012. In comparison with other countries in Central and Eastern Europe, this is still low in per capita terms. While the macroeconomic situation should be supportive of consumer demand for new vehicles, Bulgaria faces significant infrastructural constraints.

The Bulgarian market remained highly competitive in the first three quarters of 2007, with the leading brand Toyota achieving an 11.67% stake, putting it more than 2% ahead of its nearest rival Ford on 9.4%. Toyota was second place to Peugeot in 2006, but the French brand has slipped to third place as the Japanese firm has strengthened its position. Autos importers are increasing their number of showrooms and after-sales facilities in an effort to increase their share of Bulgaria's burgeoning sales.

In terms of domestic production, the focus is very much on the automotive components industry. A large proportion of output (over 60%) is exported, often to the booming assembly markets of larger CEE neighbours. With Romania's automotive industry taking off, the Bulgarian parts sector is attracting high levels of investment. From the beginning of 2008, the Montupet plant in Rousse will manufacture 230,000 aluminium cylinder heads per annum, with Renault and Dacia ordering 200,000 and 80,000 units respectively. Lear Corporation, which manufactures automotive interior systems and components, has also indicated it would like to build a plant in Bulgaria and is examining a number of sites.

While Bulgaria's automotive production capacity is exclusively focused on the supply sector, the country has not given up on the idea of attracting investment to set up its own automotive plant. In February 2007, Sofia Technical University unveiled its own concept car called the Univers, a low-cost model designed to compete against Romania's Dacia Logan. Harald Leschke was involved in the university's project to design a five-seat car that would sell for EUR7,500-8,500. The project is sponsored by Mercedes, Brabus and Samsung and a number of Bulgarian firms. In May 2007, the financial and industrial firm AKB Fores HAD offered to finance and assemble the model at its three factories in Sliven. Bulgaria is now a prime investment destination for autos majors, but it remains to be seen whether a Bulgarian-engineered car has the capacity to compete against budget rivals Dacia and Skoda.

Contents

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Chapter 1 – SWOT Analysis

Bulgaria Auto Industry SWOT

Bulgaria Economic SWOT

Chapter 2 – Europe Regional Market Overview

Production

Table: European Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: European Autos Production By Group, H106

Table: Central And Eastern European Car Assembly Plants, 2006 (Countries under review)

Table: The Rise In Central And Eastern European Production And Average Wages

Sales

Table: Europe Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: EU And EFTA Autos Sales By Group, H106

Table: New Vehicle Registrations By Market In Europe (EU and EFTA), 2006

Table: New Car Registrations by Market in Europe (EU and EFTA), 2005

Competitive Landscape

Table: EU-15 And EFTA, Car Registrations, 2005

Table: Top 10 Best Selling Models In Europe, Jan-May 2000

Suppliers

Table: Top Five OEM Parts Suppliers, 2005

Regulation

Chapter 3 – Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production & Sales

Table: Bulgaria Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: Bulgaria Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast

Table: Bulgaria: Macroeconomic Data & Forecasts

Country Snapshot: Bulgaria Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 – Commercial Vehicles

Regional Market Overview

Table: Regional Commercial Vehicle Market: Country Ranking, Sales

Table: Regional Commercial Vehicle Market: Country Ranking, Production

Table: Regional Commercial Vehicle Market: Company Ranking Of Significant Regional Manufacturers

Table: Recent And Planned Investments In Central And Eastern Europe

Bulgaria Market Overview

Table: Bulgaria: Key Players – Bulgarian Commercial Vehicles Sector, Jan-Apr 2006

Sales

Table: Size Of Commercial Vehicle Market

Table: Commercial Vehicle Market Forecast: Bulgaria

Chapter 7 – Competitive Landscape

Industry Trends & Developments

Regulation

Brand Competition

Table: Bulgaria: Top 20 Key Players – Bulgarian Car Sector, Jan-May 2005

Component Production

Table: Component Production

Chapter 8 – Company Monitor

Regional Case Study: Kia

Sales

Table: Kia Sales in Europe (EU and EFTA), By Model

Production

Table: Kia Production In Europe (EU, EFTA, Romania and Turkey), By Model

Company Profiles

EPIQ Electronic Assembly

Grammer JSC

Alucom

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Wages (ave. labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for European Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's European Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: